[Stoves] Affordability perceptions
David Meed
dbmeed at gmail.com
Wed Jan 15 07:49:38 CST 2020
On Tue, Jan 14, 2020 at 8:51 PM Paul Arveson <
outlook_32A675455D056F09 at outlook.com> wrote:
> While in Ghana in 2015 I was told (by Ellen Seldenhuis) that in rural
> Ghana, per capita income is about 2 cedis per day, or 50c US per day.
>
>I translated prices to get a feel for the perceptions in rural Ghana:
>Perception in US Perception in Ghana
How Many Days work?
Free Free Free Free
1c Incidental $2.74 Incidental
10c Incidental $27 OK if needed
1/5 day
$1 Incidental $274 Needs
financing 2 days
$10 OK if needed $2740 Needs financing
20 days
$20 OK if needed $5480 Needs financing
40 days
$50 OK if needed $13,700 Very difficult
100 days (over 1/3 of the year)
$100 OK if needed $27,400 Very difficult
200 days (almost 2/3 of the year)
$300 OK if needed $82,200 Out of the question
600 days (almost 2 years)
> [snip]etc.
This is an excellent point. Something I like to think about in relation to
affordability is "how many days work." In other words - how many days at
an average wage would I have to work to purchase something. And then we
get into the agricultural model where I may only receive income when I sell
my crop - so I don't have ANY income for most of the year and then I have
to save any cash I get to last me until the next crop comes in.
Adding a "days" column puts it in real terms that I can translate back to
my own life - that $100 price point that looks like a very low amount to me
can represent almost 8 months income in rural Ghana. 8 months of my own
income is $...
David Meed
>
>
> Could this be right? I checked; an official Ghana report from 2008 stated:
>
> "Average annual household income in Ghana is about GH¢1,217.00 whilst the
> average per capita income is almost GH¢400. With an average exchange rate
> of GH¢0.92 (¢9,176.48) to the US dollar prevailing in June 2006, the
> average annual household income is US$1,327 and the average per capita
> income is US$433 (Section 9.8). There are regional differences with Greater
> Accra region recording the highest of GH¢544.00 whilst Upper West and Upper
> East regions had less than GH¢130.00. Urban localities had higher per
> capita income than rural localities."
>
> http://www.statsghana.gov.gh/docfiles/glss5_report.pdf [link no longer
> exists].
>
>
>
> The 2015 exchange rate was 3.7 cedis per US dollar, down from .92 cedis
> per dollar. Ghana was then experiencing about 40% inflation, but it is
> now down to about 8%.
>
>
>
> Taking the average per capita income number quoted, and adjusting to the
> exchange rate, gives about $1 US per day per capita income. This is
> averaged over the whole country, whereas Ellen was probably giving a value
> in the rural part of the country where she lives. So for this region,
> Ellen is right.
>
>
>
> This difference in incomes is breathtaking.
>
>
>
> The average purchasing power per day per capita in the US is around $137
> (or $50,000 per year) -- about 274 times the 50c/day income in rural
> Ghana. No wonder Americans cannot relate to this level of poverty.
>
>
>
> To help understand this, I arranged prices in a scale of psychologically
> perceived costs as follows:
>
>
>
> Level:
>
> 1 - Free, with no hidden costs
>
> 2 - Incidental; no significant impact on bank account; no need to budget
>
> 3 - OK if it is needed and fits within budget; no financing needed
>
> 4 – Needs financing - significant expense but can be financed over time
>
> 5 – Very difficult - even with financing, would be a painful sacrifice to
> our lifestyle
>
> 6 - Out of the question; irrelevant to us
>
>
>
> I translated prices to get a feel for the perceptions in rural Ghana:
>
>
>
> Perception in US Perception in Ghana
>
> Free Free Free Free
>
> 1c Incidental $2.74 Incidental
>
> 10c Incidental $27 OK if needed
>
> $1 Incidental $274 Needs
> financing
>
> $10 OK if needed $2740 Needs financing
>
> $20 OK if needed $5480 Needs financing
>
> $50 OK if needed $13,700 Very difficult
>
> $100 OK if needed $27,400 Very difficult
>
> $300 OK if needed $82,200 Out of the question
>
> $1000 Needs financing $274,000 Out of the question
>
> $3000 Needs financing $822,000 Out of the question
>
> $10,000 Needs financing $2,740,000 Out of the
> question
>
> $100,000 Very difficult $27,400,000 Out of the
> question
>
>
>
> For instance, a dinner entree in a Chinese restaurant in Accra cost me 30
> cedis. This is equivalent to about $7.50 US. In rural Ghana it is
> psychologically equivalent to about $2000.
>
>
>
> I think this difference in perceptions is one of the reasons why some of
> the products being promoted for developing countries will never be
> accepted. It also explains why people seek to obtain fuel for free, even
> if it requires using their own hard labor, rather than pay anything for
> it. "Free" means the same thing in both cultures.
>
>
>
> It is true that people in poor countries are often are accused of being
> unwilling to change and adapt to the new products that the developed world
> wants to provide. However, I think the affordability perceptions are so
> out of alignment that this amounts to blaming the victim. (Affordability
> is not within the scope of the ISO cookstove standard being developed, but
> it is implicit in the context of the sponsors to focus on the cooking needs
> of the developing world.)
>
>
>
> In light of this situation, I am interested in getting fuel cost data to
> estimate affordability in other places. If you have references, please let
> me know.
>
>
>
> Thanks,
>
>
>
> Paul Arveson
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